1. I’m back blogging now after a break for a few days to give 8 hours of lectures during the weekend residency for the Business Economics course in UM-Flint’s NetPlus! MBA program.
2. Even without any new posts for a few days, web traffic to CD was heavy over the weekend because of a link to a previous CD post on Slate.com. I think that CD post set a record for the most number of comments on a single CD post: 55.
From today’s WSJ’s editorial “The Kids Are All Right“
NAEP reported this week that 79% of twelfth graders passed the first-ever national economics test. Holy Hayek.
The test included technical questions on price floors, opportunity cost, and the supply curve. One question asked what would happen if government mandated a high price floor for chocolate. A plurality deftly analyzed a graph to choose the correct answer: There would be a surplus of chocolate. Presumably the test could have asked about a minimum wage, too, and students would have arrived at a similar conclusion. Maybe Congress should make this test, or one like it, mandatory for all Members.
All of this welcome economic literacy comes despite the fact that only one-third of states require a course in economics for a high school degree. Yet when economics is offered, it is a popular choice: In 2005, 66% of graduates had received formal instruction, compared with 49% in 1982. The depth of knowledge shown by ordinary seniors suggests that they have been able to absorb basic economic truths from their daily experiences. Now, if this wisdom can only survive four years of instruction by your average college faculty.
Lou Dobbs, listen up:
Hindustan Times: Indian software giant Wipro (NASDAQ: WIT) plans to open several software development and IT facilities in the United States.
In addition to a software development center to be opened in Atlanta within the next three months, India’s third-biggest software maker is considering opening three new U.S. facilities: Raleigh, NC, Austin, TX and Richmond, VA, which could open as early as next year.
However, the company first wants to see “how it goes” when its Atlanta center opens by the year’s end. Wipro expects within three years to have about 1,000 American workers in Atlanta.
Bottom Line: Outsourcing and trade work both ways. American companies hire workers in India, and Indian companies hire workers in the U.S.
1. From today’s Washington Post “12th-Graders Show Strength in Economics“:
“Forty-two percent of 12th-graders nationwide scored at the proficient level or better on the economics test, meaning they could handle challenging subject matter. In contrast, just 23% of 12th-graders hit the proficient mark in math, according to results published earlier this year. In reading, 35% were proficient or better.”
2. From today’s NY Times “12th Graders Show Better Grasp of Market Forces Than Expected on U.S. Economics Test“:
“The nation’s high school seniors performed significantly better on the first nationwide economics test than they did on other recent national exams in history and science, and demonstrated higher than expected understanding of basic market forces like supply and demand than officials expected.”
3. Question: Where is the best place to learn about economics?
Answer: Blogs, according to Tyler Cowen.
According to futures trading on Intrade.com, there is only a 8.5% chance that the U.S. economy will experience a recession in 2007.
According to Brian Wesbury writing in today’s WSJ, “the July WSJ economic forecasting survey shows that 49 out of 60 forecasters expect real GDP to grow at an average annual rate of 2%, or faster, in 2007. Of the remaining 11 forecasters, only two expect growth of less than 1%, and only one expects a recession. For 2008, the forecasters are even more optimistic, with none expecting recession.”
“Despite this, an NBC News/WSJ poll in July found that 68% of Americans thought that the economy was either in recession already, or would experience a recession sometime during the next 12 months. Interestingly, this is not much of a change from the past. This same survey question has been polled at least five times since September 2002. Each time a robust majority of between 65% and 85% of respondents thought a recession was either underway or would occur within the year. Americans have been bearish on the economy for quite some time.”
Why the disconnect between economic reality and the general public’s misguided and distorted perception of the economy?
Brian explains it this way: “A randomly selected pairing of economists from the WSJ forecasting panel would pit two rather optimistic forecasters against each other in debate. But having two economists debate about whether GDP will grow 2.1% this year or 2.4% is downright boring. As a result, the producers of business news spice things up. They arrange for debates between a bullish economist and a bearish economist.” (MP: Like my debate on Kudlow & Company.)
“While this is entertaining, and may bring in eyeballs, which sell commercials, this idea of “fair and balanced” debates leaves an impression that the experts are split 50/50, when in reality it’s more like 80/20, or 90/10. But if all the public sees is an endless stream of 50/50 debates, then it is really not that much of a surprise that people think the future is basically a coin toss. And a coin toss, especially in a time of war and terrorism, is not very good odds.”
Tiger’s thrilled with his new 20/15 vision through LASIK surgery
Slate.com asks an interesting question “If steroids are cheating, why isn’t LASIK?”A month ago, Mark McGwire was hauled before a congressional hearing and lambasted as a cheater for using a legal, performance-enhancing steroid precursor when he broke baseball’s single-season home run record.
A week ago, Tiger Woods was celebrated for winning golf’s biggest tournament, the Masters, with the help of superior vision he acquired through laser surgery, which upgraded his vision to 20/15. Golfers Scott Hoch, Hale Irwin, Tom Kite, and Mike Weir have hit the 20/15 mark. So have baseball players Jeff Bagwell, Jeff Cirillo, Jeff Conine, Jose Cruz Jr., Wally Joyner, Greg Maddux, Mark Redman, and Larry Walker. Amare Stoudemire and Rip Hamilton of the NBA have done it, along with NFL players Troy Aikman, Ray Buchanan, Tiki Barber, Wayne Chrebet, and Danny Kanell.
What’s the difference?And what about high-powered contact lenses? McGwire’s custom-designed lenses improved his vision to 20/10, which means he could see at a distance of 20 feet what a person with normal, healthy vision could see at 10 feet. Think what a difference that makes in hitting a fastball. Imagine how many games those lenses altered.
Why is someone who sells tickets to a Red Sox fan outside Fenway Park for a heavily inflated price called a “scalper,” while someone who charges the same fan $4 for a bottle of water inside the stadium is called a “concessionaire”?
Why does anyone thinks the government should be involved in deciding how much a willing buyer can pay a willing seller for tickets to a lawful entertainment event?
We all take it for granted that if you’re willing to pay for the privilege, you can stay at the best hotel, live in the best neighborhood, eat at the best restaurant, or hire the best lawyer. So what accounts for the heavy breathing when some fans pay a premium in order to see Daisuke Matsuzaka take the mound or watch David Beckham bend it with the L.A. Galaxy? Or — this isn’t only about sports — to hear Beyoncé sing “Irreplaceable” or catch a sold-out “Wicked” on Broadway?
All told, 42 states have decided that the heavens won’t collapse if people who own tickets to games and shows are free to sell them for whatever the market will bear — as free as people who own real estate, shares of stock, Beanie Babies, or just about anything else.
~Jeff Jacoby, writing in today’s Boston Globe